Five predictions for the economy and what to do about it

Roger Martin-Fagg made five predictions for the economy at the AEO Conference 2008. This is the Client Director Henley Management College economist who has made many gloomy predictions in the past and said at the same event last year

there has been a huge party and we lost our senses. Now for the hangover.

But it was not all gloomy. Martin-Fagg also came up with suggestions as to what to do about it. First the predictions.

  1. UK economy to remain in recession until end of 2011 and the US until the end of 2010.
  2. UK economy to shrink by 6% over next three years or £50 billion.
  3. Asian economies to suffer far more they had imagined.
  4. UK banks to go to government for £60 billion of further funding by next summer, effectively nationalising them.
  5. UK savings ratio already going back up but needs to get to +4%. Each 1% represents £7 billion out of the economy. 

What to do about it?

  1. “Take market share by being distinctive”. Expensive, top end and cheap, bottom end will do far better in any business sector. It is those in the middle who will suffer.
  2. “Invest in anything to do with old people”. Care homes, drugs for the elderly.
  3. “Invest in new kit”. Any company with money should continue to invest, particularly in innovative, new technology.
  4. “Don’t drop your prices, rather introduce small price increases”. Keep your margins up and put any price rises down to exchange rates or whatever.
  5. “Only start buying assets again when people still don’t think that we have reached the bottom of the recession”. He suggested not for another 18 months at least. 
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About John Welsh

John Welsh has spent his entire working life in business-to-business media, first traditional publishing, having edited three magazines over 14 years, and, second, exhibitions since 2007. He started this blog on 22 June 2008 and ended it on 18 May 2010.
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6 Responses to Five predictions for the economy and what to do about it

  1. Roger Martin-Fagg will be speaking at ‘R is for Recovery – not recession’ on 23rd April 2009 at Kempton Park Racecourse.

    The ever changing economic climate and unprecedented upheavals in the financial sector and on the high street are prompting us all to reassess how we run our businesses.

    The greatest strength of entrepreneurs is eternal optimism – however in today’s ‘bloodbath’ it can feel very lonely at the top.

    R is for Recovery is a one-day event produced in association with The Academy for Chief Executives and aimed squarely at owners and directors from businesses employing between 5 and 250 people.

    The event will explore via expert speakers:

    • When will the ‘upturn’ come and what will be the signs?

    • How you can be a ‘partner’ not a ‘supplier’

    • What Google and the Internet can do to drive your business forward

    • How to deal with stress and cope with change

    • How to develop breakthrough ideas for you and your business

    • Why ‘Your Health’ is as important as the health of your business

    Kempton Park Racecourse, TW16 5AQ

    Delegate price is £295.00

    If you have a promotional discount code, you will be prompted to apply it on the booking page.

    Price includes Masterclass, all course material and pre-reading, morning and afternoon tea/coffee and a networking buffet lunch

    If you’d like to book more than 5 places then please email events@freshbusinessthinking.com or call Lucy on 0845 5000 328

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